Author Topic: Loan payment to LLC partner  (Read 732 times)

Janson

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Loan payment to LLC partner
« on: November 23, 2015, 09:02:20 AM »
I'm considering forming an LLC in the state I currently live in with someone from my home state. The plan is to buy a property around 100k. We'd both put up some cash, my business partner would put up the majority and then I would make loan payments to her until I've paid 50% of the total cost.

The LLC would be "paying" for the property in cash, so would the amount I'm paying to my business partner be considered a personal loan outside of the LLC? Is there a better way to do it? Any insight would be great, thanks!

GizmoTX

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Re: Loan payment to LLC partner
« Reply #1 on: November 23, 2015, 09:48:25 AM »
If I understand this correctly, let's say the LLC plans to buy a property for $100k, with you & your partner holding 50-50 share ownership. Your partner puts in $75k & you put in $25k. If I were your partner, I'd want your ownership share reduced by the amount of your outstanding note as collateral in the event that you default. So, the note needs to be inside the LLC.

What does the LLC plan to do about operating expenses?

Janson

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Re: Loan payment to LLC partner
« Reply #2 on: November 23, 2015, 09:57:53 AM »
That makes sense, I just don't know how to go about doing the note in the LLC.

For operating expenses we'll pay out of an account under the LLC. We'll make converative estimates for capital expenditures, maintenance, taxes etc and then pay what's left after those assumptions to the LLC members.